Between June 2 to June 4, senior representatives from across the hospitality industry will head to New York for the 46th Annual NYU International Hospitality Investment Conference (NYUIHIIC).

This year’s speakers include top executives from Starwood Capital, MCR Hotels, Vici Properties and many more. We will also have exclusive on-stage interviews with David Solomon, CEO of Goldman Sachs and Jonathan Gray, Chief Operating Officer of Blackstone.

The following preview is part of a series aimed at bringing you a flavour of the conversations you can expect on stage, highlighting some of the big-picture trends and themes ahead of the event.

It’s never been harder for brands to differentiate themselves to both investors and consumers in the limited service sector. What is the right approach and how can you stand out? At the upcoming NYU International Hospitality Investment Conference, which kicks off in just over a week we’ll hear from some of the leading lights in the industry.

Ahead of NYU we caught up with Sonesta’s Brian Quinn​. Quinn will be speaking on a panel entitled ‘Limited service: Differentiating in a time of brand proliferation​’ (Monday 3 June, 2.00pm Segments & Markets Track).

Hospitality Investor: In navigating complex deal structures, what are some common pitfalls investors should be aware of, and how can they be mitigated?

Brian Quinn: I’m really watching market volatility and mitigating that by conducting thorough due diligence to uncover potential risks and liabilities. We’re constantly managing unrealistic assumptions by validating assumptions through rigorous analysis and scenario planning. Finally, overcoming poor communication and alignment by establishing clear communication channels and foster open dialogue among all stakeholders.

Hospitality Investor: How do you determine the appropriate leverage levels for a hospitality investment, considering both market conditions and risk tolerance?

Brian Quinn: We start by assessing market conditions, analyzing current occupancy rates, ADR and RevPAR in the market and consider trends in tourism/business travel. We look at the specific location and evaluate the potential appeal to target customers/market. The quality of product is key, consider the property, amenities that can be available, etc. And finally, review the financial analysis to make a final determination.

Hospitality Investor: What role do partnerships and collaborations play in structuring successful hospitality deals, and how do you identify the right partners?

Brian Quinn: Partnerships and collaborations are pivotal for successful deals, as they allow for access to additional resources, new customer segments and markets; they can provide innovation and creativity by combining different perspectives and approaches to stay ahead of the curve; and can support operational excellence.

Hospitality Investor: How do you assess the viability of different investment strategies in today’s hospitality market, considering factors like changing consumer preferences and technological advancements?

Over the past few years, the hospitality industry has battled with market oversaturation with major hotel groups introducing new brands every few months. At Sonesta, we take an owner’s view to our brand offerings with a dedicated focus to having a cohesive brand narrative and understanding what consumers are looking for and meeting them where they are in their journey.

While it can be tempting for developers to put up as many properties as possible, we look to make intentional decisions (i.e. prioritizing business-centric hotels with the ability to add a Sonesta Work Suite in primary metropolitan areas) to ensure that the financial investments are strategic and will lead to mutual success of both Sonesta and the owner.

Hospitality Investor: The theme of this year’s event is ‘Driving Alpha’, reflecting the confident outlook on the opportunities in hospitality markets with investors in the sector recognizing that success demands a profound knowledge of market intricacies, strategic timing, and creativity in deal structures. Have you got an example that you could share either in your own business or the wider market?

Brian Quinn: At Sonesta, we pride ourselves on our ability to be nimble within the industry, responding quickly to consumer and franchisee demand and capitalizing on valuable gaps in the market.

For example, in January of 2023 we launched Sonesta Essential, a brand that focuses on just that: the essential

• Through our analysis we saw a unique opportunity to create a brand that combines everything the everyday traveler may need at a reasonable price point – good for both customers and owners.
• The Sonesta Essential model was an overnight success in the franchise space and has quickly become our fastest growing brand.
• Boasting a fast, friendly, and flexible franchise model, owners can make seamless conversions from execution to opening with Sonesta.
• The success of this brand across the board (we’re launching our 15th conversion next week) is a testament to Sonesta’s acute awareness of industry trends and opportunities while leveraging opportunistic timing.

 

SOURCE: Hospitality Investor